Results FY14. Encouraging recovery in second half. 12 Feb 2015 Eric Van Zele, President & CEO

Transcription

1 Results FY14 Encouraging recovery in second half 12 Feb 2015 Eric Van Zele, President & CEO

2 Agenda I. Financial highlights II. Divisional results & Business update III. Executive focus & Outlook IV. Q&A Preliminary remark - Reported business referring to the results incl. D&A - Continued business referring to the 2014 results excl. D&A and with pro forma 2013 figures where appropriate 2

3 I. Financial highlights

4 Financial highlights 2H14 Orders 499.6m, 15.9% below last year Sales 553.0m slightly (1.3%) below last year Gross profit 33.9% EBITDA 73.7m or 13.3% EBIT 23.9m or 4.3% FCF 18.2m 2H14 (in millions of euros) Sales EBITDA EBITDA % Entertainment & Corporate % Healthcare % Industrial & Government % Defense & Aerospace % Ventures % Intra-group eliminations (0.2) Group % 4 Reported Business

5 Financial highlights 2014 Orders 1,011.2m, 12.1% below last year Sales 1,051.0m, 9.2% below last year Gross profit margin 33.4% EBITDA 128.6m or 12.2% EBIT 38.2m or 3.6% Net income 27.8m FCF 10.1m ROCE 6% Net cash 63.4m 2014 (in millions of euros) Sales EBITDA EBITDA % Entertainment & Corporate % Healthcare % Industrial & Government % Defense & Aerospace % Ventures 41.1 (0.3) (0.7%) Intra-group eliminations (1.2) Group 1, % 5 Reported Business

6 Performance History Group Sales in m CAGR CAGR Sales: CAGR EBITDA: 10.5% 39.8% EBITDA in m , , , , Sales Discontinued Sales Continued EBITDA Continued EBITDA 6

7 Editorial comments ORDERS & SALES Order Book Order Book Reported down to 433.4m from end of 2013 Order Book Restated for divestments & debookings levels with 2013 (in millions of euros) 2H14 1H14 2H13 1H13 Order Book Reported Order Book Continuing Order Book Restated Post a disappointing 1H14, Barco produced stronger results during 2H14 All Barco s core divisions progressed y-o-y in terms of sales contributions with decent EBITDA contributions (in millions of euros) Sales 2H14 Sales 2H13 EBITDA% 2H14 EBITDA % 2H13 Entertainment & Corporate % 14.9% 7 Reported Business Healthcare % 14.5% Industrial & Government % 4.8% Defense & Aerospace % 17.2% Ventures % 15.2% Group % 13.7%

8 Sales: Geographical breakdown AMERICAS EMEA APAC % 36% 27% Change YoY -8.7% -8.6% -10.8% 8 Reported business

9 Editorial comments PROFITABILITY Gross profit margin remains 33.4% Indirect costs decline by 20.6m but increase as % of sales to 34.7% vs 33.3% All core divisions delivered better EBITDA contributions in the second half, compared to the first half, but LiveDots wiped out the gains EBITDA to EBIT gap widened due to increased amortizations and impairments on capitalized development related to LiveDots and networking projects for IPC Inventory write-offs too high at 21.9m (2.1% on sales) 9 Reported Business

10 Income statement In m Sales 1, % 1, % Cost of goods sold (699.5) (66.6%) (771.5) (66.6%) Gross profit % % Research & development (115.3) (11.0%) (95.5) (8.2%) Sales & marketing (151.8) (14.4%) (160.7) (13.9%) General & administration (52.6) (5.0%) (55.7) (4.8%) Other operating result % % EBIT before restructuring % % Restructuring costs (3.3) (0.3%) (9.4) (0.8%) EBIT after restructuring % % Interest expense, net (1.1) (0.1%) (2.3) (0.2%) Income taxes (6.1) (0.6%) (8.1) (0.7%) Result after taxes % % Share in the result of JV's and associates % % Net income % % Net income attributable to non- controlling interest % % Net income attributable to the equityholders % % P/L format reported group including D&A Other operating result 2014 including 6.7m gain on the Orthogon divestment Net income attributable to non-controlling intrest ( 3.9m): third party share of result China Joint-Venture with CFG EBITDA % % 10 Reported Business

11 Income statement In m Sales % 1, % Cost of goods sold (603.7) (66.5%) (671.7) (66.6%) Gross profit % % Research & development (99.7) (11.0%) (80.4) (8.0%) Sales & marketing (135.1) (14.9%) (142.0) (14.1%) General & administration (44.3) (4.9%) (46.2) (4.6%) Other operating result % % EBIT before restructuring % % Restructuring costs (3.4) (0.4%) (4.5) (0.4%) EBIT after restructuring % % Interest expense, net (1.1) (0.1%) (2.1) (0.2%) Income taxes (4.7) (0.5%) (7.7) (0.8%) Result after taxes % % Share in the result of JV's and associates % % Net income from continuing operations % % Net income from discontinued operations % % Net income % % Net income attributable to non- controlling interest % % Net income attributable to the equityholders % % P/L format (applying IFRS5) continuing business + D&A result after taxes ( 6.1m) on separate income statement line Net income from discontinued operations EBITDA from continuing operations % % 11 Income Statement Continuing Business + D&A net result on separate line

12 Gap EBITDA EBIT Amortization on cap'd development (50.0) (5.5%) (40.2) (4.0%) Impairments on cap'd development (7.2) (0.8%) (0.7) (0.1%) Amortization on other acquired intang. (7.0) (0.8%) (8.7) (0.9%) Depreciations (12.2) (1.3%) (12.8) (1.3%) Gap EBIT to EBITDA (76.5) (8.4%) (62.4) (6.2%) 2014: Gap EBIT-EBITDA: 8.4 ppts in 2014 mainly driven by: 9.8m higher amortization in 2014 (vs 2013) on capitalized development 7.2m impairment relating to LiveDots and Networking projects for Healthcare/IPC For 2015 we expect lower amortizations offset by higher depreciations due to One Platform and One Campus investments Barring exceptional investments for growth initiatives we will continue to manage towards an equilibrium between capitalized and amortized R&D expenses 2014: 7.1m fewer R&D expenses capitalized vs prior year 2014: amortization (excluding impairment) exceeded capitalization by 2.3m Note: Barco will book exceptional gain following the closing of the D&A divestment in 1H15 12 Continuing Business

13 EBITDA waterfall 2014 vs 2013 (- 25.6m) EBITDA in m Currency Sales Mix, Cost & Pricing 1.0 Indirect Operations R&D cash expense S&M G&A Other Stock writeoffs and Warranty Capitalized Developm Gross margin (38.3) Indirect expenses 19.6 Non cash items (5.7) Sales decline in all regions - Gross margins% stable vs last year - Reduced spending in all divisions and dpts though indirect expenses still at 34.5% on sales - Selective reductions in strategic development projects - Increased stock write-offs - Other: gain on divestment Orthogon, offset by higher bad debt provisions 13 Continuing Business

14 Cash & Balance sheet 10.1m free cash flow realized in m in 1H14 and 18.2m in 2H14 Lower operating profit and aggravated by softer working capital performance 118.6m gross operating cash flow generated (vs 140.9m in 2013) 26.1m increase in working capital Net working capital balance of 8.8% on sales (vs 4.7% EOY13) ; Continuing: 4.9% Trade DSO of 63 days (vs 56 days 1H14 and 52 days EOY13) ; Contin.: 63 days Inventory turns at 2.7 (vs 1H14 and 3.2 EOY13) ; Continuing: 2.9 turns Trade 122m (vs 1H14 and 114m EOY13) 63.4m net financial cash, post acquisitions and prior to D&A divestment closing (vs 41m 1H14 and 104.4m EOY13) 6% (vs 8% 1H14 and 15% FY13) 14 Reported Business

15 II. Divisional results & Business updates

16 Entertainment & Corporate (in millions of euros) 1H14* 2H14 FY14 1H13 2H13 FY13 Sales EBITDA EBITDA margin 16.0% 14.5% 15.2% 15.7% 14.9% 15.3% Orders & shipments as anticipated DC drops with 25% but confirms global leadership with significant wins in Brazil, China & Indonesia Corporate (ClickShare) continues to grow rapidly & good response to X2O capabilities Venues & Hospitality growth with succesful integration of High End Systems Sales mix continues to shift towards professional AV Decline in DC partially offset by growth in non cinema activities 45% of sales from non-cinema activities (vs 35% last year) Continued healthy EBITDA contributions with each segment close to or above 15% First laser projectors succesfully delivered & deployed (*): 1H14 Results restated due to integration of X2O 16

17 Healthcare (in millions of euros) 1H14 2H14 FY14 1H13 2H13 FY13 Sales EBITDA EBITDA margin 11.0% 13.7% 12.4% 12.3% 14.5% 13.5% Soft first semester in diagnostic imaging and improved results in the second semester Orderbook for Healthcare remains high but delays in call-offs Sales declined primarily due to softness in the diagnostic imaging business with major OEM s & losses in Interactive Patient Care EBITDA in the 2nd half at 13.7% Market leadership remains intact & continue to drive growth in surgical Launch of UNITI (12MP display) Launch of 4K Nexxis Start to develop footprint in China 17

18 Industrial & Government (in millions of euros) 1H14 2H14 FY14 1H13 2H13 FY13 Sales EBITDA EBITDA margin -2.1% 7.1% 3.2% 7.4% 4.8% 6.1% Slow 1H order intake & sales with recovery in Western Europe & North America in the second half while demand in China stalled Shift to lower price point EBITDA recovery in the second semester due to cost-cutting measures and improved sales New competitive LCD-portfolio released 18

19 Defense & Aerospace (in millions of euros) 1H14 2H14 FY14 1H13 2H13 FY13 Sales EBITDA EBITDA margin 12.7% 16.6% 14.8% 9.4% 17.2% 13.5% Solid EBITDA contribution; 2013 cost reductions continue to take a hold 19

20 Ventures (in millions of euros) 1H14 2H14 FY14 1H13 2H13 FY13 Sales EBITDA EBITDA margin -7.0% 10.4% -0.7% 9.0% 15.2% 11.8% Weak performance in LiveDots Slower global market demand & delays in combination with project losses in North America & Middle East Loss of topline weighs on profitability Rightsizing operating expenses & repositioning in the Entertainment division in 2015 EBITDA-recovery in 2H14 due to inflow of gains of Orthogon divestiture ( 6.7m) 20

21 III. Executive focus 2015 & Outlook

22 Outlook 2015 (*) Assuming the euro remains at current levels, management expects flat to single digit growth in sales. On the basis of the improved performance in the second half 2014 management expects also to deliver improved profitability for the full year. (*) Guidance excluding the exceptional capital gain following the completion of the D&A divestment. 22

23 Executive focus 2015 Restore cash flow performance by improving working capital efficiency Improve profitability by focusing on target P/L performance & continued cost reductions Strengthen geographic leadership & reinforce local governance Rebuild channels in China Implement Sales excellence program & reinforce customer intimacy Execute on a number of internal and external growth initiatives and establish new growth platforms Capitalizing on connectivity & networking 23

24 Dividend 2014 The Board of Directors will propose to the General Assembly to increase the dividend from 1.50 euro to 1.60 euro per share to be paid out in 2015, supported by the available cash resources in the company. In line with Barco s long term strategy to strengthen its global leadership position and to realize the company s growth potential, the Board has decided to preserve most of the company financial resources for internal and external growth investments and does not plan to authorize another share buy back program after the current program expires in May

25 IV. Q&A

26